Are you struggling with debt? Could you be working and have nothing to show for it? Your financial problems could stem from psychological issues. Many people’s money problems are linked to underlying emotional roots.
Many of the issues people often refer to as usual money problems often mask a mindset problem. It could be due to the financial patterns you grew up seeing; you could have developed money habits along the way that are affecting your relationship with money. Let’s have a look at some of the psychological issues that could be the cause of your money troubles.
Low Self-Esteem
When you don’t feel good about yourself, it’s common to use material things to make up for it. It could involve buying expensive clothes, shoes, bags, gadgets or engaging in activities that hurt your pockets. Someone with money problems like overspending could be doing so to make themselves feel better.
Low self-esteem could also be causing your money problems because it leads to self-sabotage. Not feeling good enough could prevent you from embracing positions that could lead to a better career or better-paying projects.
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Scarcity Mindset
A scarcity mindset refers to thinking that there are limited resources. People with this mindset believe there isn’t enough money to go around and only limited opportunities exist. A scarcity mindset can also manifest in an obsession with what you lack. So, you focus on how much money you don’t have to achieve something, thus creating a tunnel vision limiting your thinking. You are unable to see how to progress with what you already have.
The scarcity mindset is often accompanied by anxiety and fear around money and opportunities. You may also look at people with more and feel envious while telling yourself that you’ll never have such things. A scarcity mindset makes people think that there are limited positions because someone got a particular job. It can also hinder you from going after a better-paying job with more risks and instead staying in a low-paying job with security because of the fear of the unknown.
While it’s essential to be frugal and spend money wisely, a scarcity mindset creates a fixed mindset about money. It limits you from seeking more opportunities and increasing wealth.
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Trauma
Experiencing trauma in childhood or adulthood can affect your relationship with money. If you grew up in a family where money was always a problem, you could still have anxiety around financial matters even after getting a well-paying job. Experiencing sudden job loss, death, or a divorce could also expose you to trauma that affects your relationship with money. Often, one doesn’t recognize how one seemingly unrelated trauma could affect one financially. For example, you could suddenly buy unnecessary things to deal with your unprocessed trauma.
Growing up without many things, you could buy excessive material items to compensate for what you lacked as a child. In some cases, a divorce could affect your ability to trust yourself because of betrayal, such that you second-guess every financial decision. It’s advisable to deal with your trauma and, if possible, work with financial planners to get you back on track.
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Anxiety
Anxiety makes you blow things out of proportion. You suddenly become excessively worried about a situation and think of the worst-case scenario. Such thoughts affect your decisions while handling money. Anxiety could also keep you distracted, making it impossible to make sensible financial decisions.
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Depression
Many people experiencing depression have trouble doing day-to-day tasks. The lethargy extends to work, which can jeopardize their income opportunities. Further, finding life exhausting limits their ability to make sound decisions around many things, including money. How To Overcome Emotional Spending
Addiction
Addiction can be pretty expensive. Whether one is addicted to food, drugs, alcohol, gaming or gambling, they’re willing to spend their last coin to feed this addiction. Additionally, most addictions affect one’s ability to perform at work, thus creating a cycle of low income used to satisfy addictions.
Fear
For many people, having made poor financial decisions in the past triggers the fear that you’re likely to repeat them. For example, making a significant wrong investment can cripple your mind. Even when a good opportunity presents itself in the future, you’re likely to think the past will repeat itself. It takes getting better financial knowledge and rebuilding trust in your decisions to overcome the fear.
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Final Thoughts
Financial decisions and behaviour are tied to our mental well-being. Poor financial choices don’t happen in a vacuum. If you constantly find yourself in a financial rut, it’s advisable to get to the root of the matter because it could stem from a psychological issue.
Also, check out
5 Ways To Improve Your Relationship With Money
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